Irish drugmakers warn over jobs and access

Ireland is now the world's biggest net exporter of pharmaceuticals, but industry groups have warned the government of the need for sustainable policies to secure and foster the future of the nation’s “greatest economic success story."

Ireland's biopharmaceutical industry accounts for over 50% of the country's exports, worth some 51 billion euros, plus half of all corporation tax, and it employs over 25,000 people. Currently, nine out of the top 10 global pharmaceutical companies have facilities in the country. However, this strong position is now under threat as a result of the upcoming patent expiries on a number of blockbuster drugs, with some estimates putting the resulting fall in worldwide revenues as high as $100 billion.

"Many of these blockbuster drugs are manufactured in Ireland. The key challenge is to continue to develop the sector as a global centre of excellence for innovation and development," said Matt Moran, director of industry group PharmaChemical Ireland, speaking at a meeting of government and industry leaders in Dublin yesterday.

Mr Moran called on Ministers for a healthcare policy that supports access to innovative medicines and technologies developed in Ireland. It was vital, he said, that the government should continue to take a long-term view of the overall cost of health care and regard the funding of medical treatment as an investment in the nation's health and economic prosperity.

"Such an approach will send a positive signal to pharmaceutical companies," he said.

The government's Action Plan for Jobs 2012, announced earlier this month, has highlighted the key role of the pharmaceutical industry, and while this is encouraging, it needs to ensure existing employment is also protected, added Danny McCoy, director of the Irish Business and Employers Confederation (IBEC).

"We need to enhance the R&D tax credit schemes to encourage companies to base R&D functions here, and continue to work to ensure our cost base is globally competitive," said Mr McCoy.

David Gallagher, president of the Irish Pharmaceutical Healthcare Association (IPHA), acknowledged the need to make savings in the health budget, but added that this burden must be fairly shared, and that any savings must be balanced against ensuring Irish patients can access innovative medicines.

The industry is producing innovative, cost-effective, much-needed new medicines but, in many cases, these are not reaching Irish patients because the government is not reimbursing them, he said. "We have made a significant contribution to government savings, with 300 million euros delivered under the current agreement since 2008, and an additional 240 million euros delivered in 2010-11 in recognition of the exceptional budgetary constraints, on the express understanding that this would ensure that access would be secured for new medicines," said Mr Gallagher. But, he added: "this has not happened."

The Action Plan identifies the need for closer interaction between the health system and industry, and identifies a current lack of engagement between them, particularly in relation to research, clinical trials and the development and related manufacturing of innovative health care products and services, he said.

"The current situation regarding the reimbursement of new medicines is a demonstration of this lack of engagement, which is clearly being dictated by the health system authorities and not the industry," said Mr Gallagher. As a result, the market in Ireland has declined significantly, and it is not now in a position to absorb further price cuts without "a very negative" impact on employment and future investment, he warned.

"Existing cuts have already put pressure on jobs across the country - any further reductions will raise serious question marks over the attractiveness of Ireland as a future investment location and the potential damage to employment, both existing and future, would be significant," he said.

"As government seeks to maximise public health outcomes on constrained budgets, cost-effective, innovative medicines represent real value for money and efficiency. The debate has to switch from cost to value and recognition of the intrinsic role medicines are contributing to Irish health," said Mr Gallagher.

- The government's first annual Action Plan for Jobs, announced on February 13, contains over 270 actions to be implemented by government departments and state agencies this year aimed at rebuilding the economy and creating jobs. Among these initiatives are the development of a Health Innovation Hub to drive cooperation between the health system and industry.